You found an amazing Web3 project. Your Cousin’s best friend says it’s “headed to the moon.” In 2021, throwing down on that project could have been quite lucrative. Things have changed though, and everyone’s investing skills need to adapt and upgrade.
5 Pro Tips on Researching from NGMI Lab
Last month we discussed how to analyze project tokenomics like a pro. Here we offer five pro tips on how to research Web3 projects. Today’s professional researcher is Komal “Koko” Amin, Co-founder of NGMI Lab. NGMI Lab is a professional Web3 research house with thousands of hours of expert research condensed into unbiased and easily digestible reports for investors. Their research reports are sought after by large venture capital groups and investors worldwide. The following are five tips so you can start researching Web3 projects like the pros.
Read the Whitepaper
While this can be a painfully slow and boring way of doing research, it must be done. As an investor you must take pride and empowerment of your own intelligence. If the whitepaper is too hard for you to read, don’t blame yourself. If the average investor or user cannot understand the core document, people will not be onboarded to the project. If the whitepaper is not easily digestible, then the communication abilities of the project are lacking, and investors should think twice about investing.
Leverage Community Spaces to Get Access to Project Founders
Web3 projects are not the same as Web2 projects. The main difference is access to senior people involved in the development of the project. In Microsoft for example, no one expects to be able to ask senior developers questions about progress and ongoing development. But Most Web3 projects offer community spaces on twitter, discord, telegram, and more so that investors can ask questions directly. Find out who runs the projects and ask questions of these Web3 teams. They should be accessible, and you should be able to get a lot of information from them. If you can’t, think twice.
Who is the Competition
Identify the competitors that are developing in the same arena. These competitors may already be addressed in the whitepaper, which is a plus, but if not find out who is trying to build something similar. Who is the team behind the competition and how do they differ? Often there is a minimum of 3-5 projects trying to do the same thing. The distinction on projects is often the team. Investors must make time to analyze the team and their experience. It’s not always the big company with a long history that succeeds, the track record must be with the actual team members on the project.
The Value of the Network
So, you’ve decided the team has a proven track record and drive. Investors must remember these projects are still competing with Web2. The team needs the networks and inroads to disrupt and infiltrate the Web2 space. Imagine a new DeFi app that needs a banking system integrated. The concept might be flawless, but if the team lacks connections to the banking world, this project may never get off the ground. Their network is crucial, and it may be obvious, but if the team is not doxxed, it is almost impossible to learn for sure who their network is.
Have a List of Principals
Finally, investors should eventually develop their own list of principals that are written down and not deviated from. These principals are meant to save investors from making bad decisions. The list might include items like having a doxxed team, project values, investing in seed rounds only, EVM compatible projects, and so on. Whatever the principles are, have them, and stick to them.
These pro tips are intended to help investors start to refine their Web3 research strategy for 2023. They are not comprehensive, and research companies like NGMI Lab are available for investors that want the same research that Venture Capital groups have access to. Whatever your strategy is for researching Web3 projects in 2023, the most important tip is to have one.
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